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Clive Palmer's carbon plan makes sense

The Palmer proposals go some way towards a workable compromise between the Abbott government's clear mandate to end the carbon tax and the need to replace it with something better than the Coalition's expensive and deeply flawed Direct Action plan.

Clive Palmer: "The world is constantly changing and it is the ability to adapt that really matters." Photo: Alex Ellinghausen

At last welcome signs of a positive approach to climate change, given the reality that the carbon tax was rejected by the people.

The key proposals put on the table by Palmer United Party leader Clive Palmer on Wednesday evening are based on a rationale the Herald has pushed since last October and repeated this week. They include measures the Herald has proposed to break the cycle of cynical politics that has delayed and derailed an effective approach to one of the nation’s biggest challenges.

Standing beside global warming pin-up boy and former US vice-president Al Gore, Mr Palmer revealed the three incoming PUP senators who in effect hold the balance of power would vote to scrap the carbon tax, due to rise to $25.40 next week.

Crucially, PUP will only do so if it is replaced with a dormant emissions trading scheme with the carbon price set at zero – as the Herald has suggested – until Australia’s trading partners implement a similar scheme.

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As Mr Gore wrote in the latest Rolling Stone magazine: ‘‘I believe there is a realistic hope that momentum toward a global agreement will continue to build in September and carry through to the Paris negotiations in late 2015.’’

While a two-year freeze on a floating carbon price may be more reasonable, the Palmer plan at least gives Australia flexibility and has some chance of winning Coalition approval.

The Palmer proposals go some way towards a workable compromise between the government’s mandate to end the carbon tax and the need to replace it with something better than the Coalition’s expensive and deeply flawed Direct Action plan.

The Palmer plan is a game-changer that recognises, as the Herald has argued, the world is moving quickly towards combined action on global warming. ‘‘The world is constantly changing and it is the ability to adapt that really matters,’’ Mr Palmer said.

The Palmer proposal gives the Parliament – be it this one or the next – the power to determine the details of a new emissions trading scheme. This is designed to allow examination of how Direct Action can work better and potentially morph into a cheap baseline and credit scheme that has the support of other key senators.

Mr Palmer has also vowed to save the successful and taxpayer-friendly Clean Energy Finance Corporation – the sort of ‘‘green bank’’ Mr Gore has said is crucial to tackling global warming.

The onus is now on the Abbott government to be pragmatic and negotiate. Talk of pulling the double dissolution trigger it has been given through rejection twice of the CEFC repeal bill is premature and misguided. The government knows it can end the carbon tax without having to keep arguing for Direct Action and without risking total defeat.

The Palmer proposals are not extreme. They also demand the present 20 per cent renewable energy target – which some in the Coalition are urging the government to scrap – remains in place and that the government ensures all of the savings from lower energy costs are passed on to households.

The Abbott government must face reality that its all-or-nothing approach will end in tears. On the $7 GP co-payment, Mr Abbott is reportedly open to alternative models. That is a positive development. As the Herald has argued, the current plan is deeply unfair and threatens to create a two-tier health system. But a staggered co-payment with greater safeguards for the poor could have benefits.

Some evidence-based compromise is needed from all sides, especially given the way in which the Greens shunned negotiation and back-flipped on one of the few budget measures that make sense.

In deciding to join Labor to stop the reintroduction of six-monthly indexation of the fuel excise, Greens leader Christine Milne in effect avoided a fight with potential leadership rivals in a move that placed her personal future – and ideological disdain for miners and business – ahead of budget security. The return of indexation would have delivered a net gain of $2.2 billion over the forward estimates and much more further into the future. Yet in a brain explosion, Senator Milne has decided against sending a price signal to reduce motor vehicle emissions.

She argued it was pointless to debate indexation because the government would not have budged. But now the rules of engagement in the Senate are about to change. Every side of politics should do all they can to engage and actually get something done.

2 comments

This is the death toll for coal generation in Australia.

A $0 ETS is the most powerful mechanism to prevent any future investment in coal generation in Australia. There will now be a shadow price on carbon which every investor, banker, and developer will have staring in their face.

More importantly, the Liberal lies of power prices doubling now comes under scrutiny. Let's see how $25/t (roughly $25/MWh in Victoria) is reduced from the $250/MWh that consumers are charged in their tariff. Already the retailers are squirming saying they won't be able to pass it through, Greg Hunt's response is the ACCC will pursue them (yeah sure). Palmer is forcing the issue, which I think is very canny sniffing the change in public sentiment so quickly.

The RET will stay, and we will see wind energy displacing coal over the short term followed by the closure of the dinosaur coal generators. Remember, wind is only costing around $80/MWh with ZERO subsidies/incentives. New coal generation is costing around $100/MWh with lots of hidden subsidies, and old clapped out coal generation like Hazelwood is costing around $35/MWh. Mathematics prevail on this.

I'm no PUP voter, however the clean energy future has an unlikely saviour in Palmer and his JFK aspirations! I can see one-term Tony kicking the wall and flogging himself in frustration!

Commenter

tadswana

Location

Brunswick

Date and time

June 26, 2014, 10:08AM

Who is writing the SMH's editorials now? Is it 10% part owner Gina Rinehart? Your statement that the Carbon Tax (I mean, Levy) was rejected by the people, in an atmosphere of fear-mongering and mis-information coming from the Lie-beral Party and the leadership wrangling in the ALP, is as shallow as Toxic Tony's claim of a mandate for breaking all his promises.

Why not introduce Clive's ETS and float the carbon price at the immediate global price. That way, our actions are immediately linked to the actions of others nations. Clive knows that there is little hope of Obama getting any climate action programs through the Republican controlled Congress. That is why Obama has been forced into regulatory action. I'm just surprised that Clive didn't include Canada on the list of trading partners that must join with us.

The SMH reponse to this is nothing more than a salve to help those who realise Australia has become a nation of Lifters to Leaners on climate action.

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